Buying a Home in Retirement: Downsizing

retirement1During retirement, we often think about how to better stretch our dollars. After all, the goal is to last longer than our money. One of the ways to make your nest last longer is to downsize to a smaller home. Downsizing to a smaller home during retirement often reduces expenses and it provides a way to get a little more cash out of your previous home. It can be especially effective if you have the mortgage on your larger home paid off. For many retirees, a smaller home makes sense. The kids have grown up and moved out. Additionally, a smaller home is easier to clean and maintain. You don’t have to spend as much time and money on upkeep. Some of the lower costs that come with a smaller home include:

•Lower utilities: Smaller house, lower bills. Save money each month on heating/cooling your home, as well as electricity and water.

•Lower property taxes: When you live in a smaller home, you are likely to see a lower appraisal from the government, and your property taxes will probably be lower.

•Fewer purchases: When you know you don’t have the room, you are less likely to make so many purchases. After all, where will you keep all that stuff? Downsizing your home can help you downsize your lifestyle altogether.

Run your retirement calculations or speak with a financial advisor to determine if you need to free up a few hundred dollars a month to live comfortably. Simply moving to a smaller property could be the solution you are looking for, since it results in monthly savings that can ease your retirement cash flow. The bottom line is your home, with its mortgage paid off, provides you with options. You can downsize your lifestyle more easily with the proceeds from the sale of your home, or you can upgrade less expensively. Just make sure you carefully consider your options before proceeding.